A report issued by Qatar National Bank / QNB / pointed to the existence of major economic imbalances at the global level, which is particularly concentrated in the American economy, whether in terms of flows (current account deficit) or stocks (mutual asset centers), warning that the exacerbation of these imbalances may increase the possibility of an uncontrolled shift in the markets.
The weekly report of the bank indicated that the commercial policies adopted by US President Donald Trump, especially those related to customs duties, have been designed to address part of these imbalances, but their accumulated size makes it unlikely that mono or bilateral measures succeed in correcting them in an organized manner.
The report considered that overcoming such economic challenges requires a coordinated approach at the international level, noting that the optimal guidance of policies may not be achieved without effective global cooperation, as was the case in dealing with major economic crises in previous periods.
The report said that it is no secret to analysts and investors that President Trump has a strong political desire to reform the global trade and financial system. The contracts of time, even before becoming a politician, Trump was explicit about his negative views on the huge deficit in the American running account and the clear debtor of the United States for the rest of the world, as well as his support for the resettlement of manufacturing in his country.
The report indicated that US President Trump did not take during his first term (2017-2021) decisive steps to turn his orientations into actual policies, given several factors, including administrative restrictions, resource and political experience, as well as his great dependence on consultants who adopted traditional positions towards trade and financing issues.
The report promised President Trump’s agenda to 2025 the biggest departure from the liberal consensus on free trade, which has been in the post -World War II era, where his vision adopts a “protective” direction.
He added in this regard, “At the heart of this new trend, there is a very accurate diagnosis that the external imbalances that the country suffers from are the result of inconsistent economic relations, such as non -mutual access to the markets, continuous foreign support benefits, theft of intellectual property, and the burdens of securing” global public benefits “, starting with the provision of the reserve currency to military security.
According to the report, there are two main factors that explain some political parties in the United States considering that time has come to take bold steps to reduce the risk of economic imbalances, the first of which is that the balance of the American running account, which measures the flow of goods, services, income and ongoing transfers with the rest of the world, shows a major structural deficit.
The report pointed out that the United States has not registered a surplus in the current account balance only three times during the past 48 years, and has not achieved any surplus since 1991, noting that after a relative improved in this deficit as a percentage of GDP during the period from 2007 to 2019, driven by the global financial crisis and the shale oil revolution, the deficit returned to widening again after the Kofid-19.
The nominal deficit was $ 1.1 trillion during the past year, recording a negative balance in all the main components of the current account except for services (travel, education and financial services). This means that the American families, companies and government, combined, consume more than they produce, which requires external financing.
The report warned that the continuation of this situation may increase the United States’ exposure to the fluctuations of capital flows, and make it more affected by the decisions of foreign investors.
As for the second factor, according to the analysis of the Qatar National Bank /Bank of QNB /, it lies in the accumulation of the current account deficit over the past decades, which led to a major imbalance in the net international investment situation of the United States, that is, in the balance between the assets kept by American residents abroad and the assets kept by non -residents in the United States
The report pointed out that this accumulation made the United States a large debtor to the rest of the world, especially for major industrialized countries such as Germany, Japan and China.